In the context of a larger agreement between Napoleonic France and Spain, the Bourbons of Parma were compensated for the loss of their territory in northern Italy (which had been occupied by French troops since 1796).

The King of Spain decided that his cousin Ferdinand, Duke of Parma had to cede his duchy to France, and in return his son Louis I was granted the Kingdom of Etruria (which was created from the Grand Duchy of Tuscany).

To make way for the Bourbons, the Habsburg Grand Duke of Tuscany Ferdinand III was ousted and compensated with the Electorate of Salzburg by the Treaty of Lunéville.

However, since Etruria was troubled with smuggling and espionage, Napoleon annexed the territory, thus it was the last non-Bonaparte Italian kingdom on the Peninsula to be absorbed into the French Empire.

[2] In 1807, Napoleon dissolved the kingdom and integrated it into France, turning it into three French departments: Arno, Méditerranée and Ombrone.